U.S. Coal Company OSM Permit

TVA owns the coal rights underlying 53,000 acre known as the Koppers Coal reserve. In January 2002, TVA leased mineral rights on portions of Cross and Atkins Mountains to U.S. Coal for underground mining on all seams of coal above and including the Red Ash seam (TVA Tract No. XeKCR-43L).

U.S. Coal subsequently applied to the Office of Surface Mining’s Knoxville Field Office (OSM) for permit to extract approximately 2,600,000 tons of Red Ash coal over a period of 7.3 years on the Atkins Mountain portion.

As part of the permitting process OSM conducted an environmental assessment (EA) of the proposed mine plan. OSM completed the EA and finding of no significant impact (FONSI), including a cumulative hydrologic impact assessment, on July 13, 2004. Consistent with TVA’s leasing process, TVA has adopted the OSM EA and issued its own FONSI, on August 4, 2004.